Bulletin: NJ2021006

Dear Associates:

Please be advised that on November 8, 2021, the State of New Jersey has enacted the following bill, S2861/A5390, which prohibits discriminatory restrictive covenants on real property. This bill shall take effect immediately. 

This bill prohibits any reference to a specific portion of a discriminatory covenant or restriction on any Deed that is recorded on or after January 1, 2022, which purports to restrict the ownership or use of real property as prohibited by the “Law against Discrimination” (LAD). 

The bill also requires a county clerk or a register of deeds and mortgages to refuse to accept any deed submitted for recordation that references the specific portion of any such restrictive covenant. 

An attorney or title company preparing or submitting a deed for recordation shall ensure that the specific portion of such a restrictive covenant is not specifically referenced in the deed prior to the deed being submitted for recordation. 

A deed may include a general provision that states that the deed is subject to any and all covenants of record. However, such provisions shall not apply to the specific portion of a restrictive covenant purporting to restrict the ownership or use of the property as prohibited by state and federal laws regarding discrimination. 

Furthermore, the bill provides that a restrictive covenant prohibited by state and federal law may be released by the owner of the real property subject to the restrictive covenant by recording a “Certificate of Release of Certain Prohibited Covenants.” 

The real property owner may record such a certificate prior to recordation of a deed conveying real property to a purchaser, or when a real property owner discovers that such a prohibited covenant exists and chooses to affirmatively release it. 

The form of the certificate shall be promulgated by the Department of Community Affairs and shall be available at the county office, or on the website of the county clerk or register of deeds and mortgages, as appropriate to the county in which the real property is located and shall also be available on the website of the Department of Community Affairs. 

There shall be no filing fee, or any other fee, charged to the owner of a real property for the filing of this certificate.

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